Midwest Energy Emissions Corp (MEEC) Continues to Hit New Highs: Now What?
It is often noticed that investors tend to focus on stocks that have displayed steady gains over a reasonable period of time and over the years such a strategy has generally proven to be correct. The Midwest Energy Emissions Corp (OTCMKTS:MEEC) stock could well be in that category considering the fact that it has recorded significant gains over the past two months.
What to Watch
During that period, the Midwest Energy stock has recorded gains of as much as 230% and it could be a good time for investors to perhaps take a closer look at the company’s business. Earlier in January, the company made an announcement with regards to a deal it struck with reached with national utility.
The company announced that according to the provisions of the deal, the national utility entity is going to be getting the non-exclusive license to use Midwest Energy’s patents. The patents are related to the process of Sorbent Enhancement Additive that is meant for removing mercury from coal-based power plants.
The national utility in question owns coal-based power plants. In light of the signing of the deal Midwest Energy has also dismissed the claims it brought against the national utility for having infringed its patents.
The Chief Executive Officer and President of Midwest Energy, Richard MacPherson, spoke about the development as well. He stated that the company is now moving ahead quickly with regards to signing new agreements and correcting the errors of the past. The new strategy from the company has also been rewarded by markets and that is apparent from the remarkable rally enjoyed by the stock over the past weeks.
Back in November last year, the company announced its financial results for the third quarter. The revenues in that quarter stood at $2.8 million, which was lower than the $3.8 million generated in the year-ago period. The drop in revenues was primarily due to the drop in coal-based power generation.
Do your own Due Diligence Links Below
Long-term success on Wall Street is all about getting ahead of the story everyone else will be chasing months or even weeks down the road. That’s why Endra Life Sciences Inc. (NASDAQ-NDRA) has my attention now.
Look at NDRA today and it’s more potential than powerhouse. The company doesn’t even make room for revenue on its quarterly pre-revenue reports yet. It hasn’t sold anything. The profitability that institutional investors demand is probably years away.
On paper, all it has to back up its $15 million market cap is $3 million in cash, miscellaneous other assets and a whole lot of talent and ideas. Big ideas. Many patents were collected over the last five years, 5 others overseas and dozens of others around the world.
Those ideas and the talent to turn them into commercial reality are the important thing about NDRA right now. All in all, they’re why the analysts who know this little company best say it will be worth $5.00 to $6.00 under the right conditions.
The firm with the most bearish take on NDRA just raised its target to $2.75 and left the door open to additional upgrades beyond. That’s pretty big talk for a stock that was trading at $0.65 at the time . . . and even now, after a blockbuster 65% run, remains within sight of a lowly $1.
THE BILLION-DOLLAR OPPORTUNITY
What have the analysts figured out that the market can’t see? Putting the dots together starts with four simple letters: N A S H.
It stands for Non-Alcoholic Steato Hepatitis. It means fat builds up in the liver (steatosis) and starts causing inflammation. In effect, it’s a form of self-inflicted hepatitis. In extreme cases, scarring and cirrhosis follow. It resembles alcoholic liver disease, only without the liquor.
And it’s a silent health epidemic that we know affects 20 million Americans and probably up to 80 million more people carry the fatty markers without knowing. Do the math and it kills more people than coronavirus . . . but because it’s progressive, the longer you have it, the worse your odds get.
NASH is now the top reason people need liver transplants today. Bigger than hepatitis. It can even cause cancer. While there’s no cure right now, Big Pharma has already spent BILLIONS ($1 billion from Gilead alone, and even then, that drug failed) trying to ring that bell. There are literally dozens of hopeful drugs in the clinic now. Most will fizzle out on the road but those that finally make it all the way to FDA approval will share a $35 billion sales jackpot.
Is it any wonder Wall Street goes nuts on the faintest whiff of progress toward a NASH cure? But if you’re curious about where tiny little NDRA fits into the story and how it hopes to compete with just about every ambitious drug company around, stop wondering.
NDRA isn’t racing the giants to a cure. That’s a fool’s game. Instead, management did a little reading between the lines and realized that they can help by coming up with better ways to detect NASH in its early stages.
Right now there are really only two ways to test for NASH: 1) a liver biopsy and 2) a full MRI to peek inside the body. The biopsy is invasive and uncomfortable. The MRI is expensive and relies on increasingly irreplaceable helium to run the magnets.
Between Option A and Option B, there’s no easy way to screen for who has NASH and who doesn’t. When you’re looking at a silent and lethal epidemic, it’s a good idea to run as many tests as you can . . . tens of millions just to identify all the people who have the condition now.
So NDRA came up with Option C. and differentiate fat from lean tissues.
THE NDRA ALTERNATIVE
Because fat is the problem, recognizing it on the scanner is all it takes. You’ve got NASH or you don’t. Follow-up tests can gauge progress or remission once those new drugs hit the market, telling doctors when to prescribe a pill or how to evaluate its effects.
NDRA’s system is proprietary. Only their machines know how to decode the waves and find the fat. The procedure doesn’t require gigantic magnets or rare helium. The machine costs 1/50 of an MRI suite.
And hospitals don’t have to buy an all-new imaging suite to run the test. This system TAEUS sits next to the existing ultrasound and plugs right in.
Say there are 20,000 radiology labs in the developed world that do ultrasound screens now. NDRA can ultimately gross $1 billion selling them each a $50,000 TAEUS unit. That’s not a bad windfall at all for a company that’s currently valued at $15 million, right? For little NDRA to trade at even 1X that “base addressable market” opportunity, it would need to unlock truly massive upside . . . which would in turn give shareholders who got in early plenty to cheer.
From there, the accounting really adds up. The system can also map temperature in the body to help guide laser- and heat-based surgical procedures. It can track blood flow down to the microscopic level. Ultimately TAEUS has the potential to spot blockages to diagnose and assist treatment of a wide range of conditions. And throughout, NDRA has made sure to keep building in ways to sell disposable equipment and charge licensing fees to people who have already built the machine.
Remember, tens of millions of people in America alone (not even counting the rest of the world) probably have NASH and need to get a definitive diagnosis. Biopsies cost $1,500 apiece. An MRI scan is running close to double that . . . and that’s when the machines are actually working and slots are available! Even if the disposables only cost a few dollars per procedure, we’re looking at real money here.
All in all, management suspects there’s $18 billion to chase. At that point, the multiplier gets vast. Again, NASH is a big problem and big money: here’s a report suggesting that just selling the genetic markers that say you MIGHT get the disease is going to be worth $2 billion a year very soon. People with the markers will still need physical confirmation. That’s where NDRA comes in.
SOLVING THE BILLION-DOLLAR PUZZLE
Of course it’s a long way from a $15 million stock with big dreams to the kind of company that can realistically conquer billion-dollar markets. NDRA today reflects reality on the ground today. However, management has done a lot of work paving the road from here to there.
To start, nothing ever happens in healthcare without regulatory approval. NDRA has already gotten clearance in Europe and is now looking to file its 510(k) medical device submission this summer, so the clock is ticking there. If you aren’t familiar with the 510(k) process, it’s a lot faster than what it takes to get a drug approved.
You really just need to prove safety and effectiveness. As long as your system doesn’t hurt people and actually provides the medical benefit you claim it does, the FDA tends to give you the green light to start selling. Historically it takes less than six months, so as long as NDRA makes its 2Q timeline, we can hope to hear back by the end of the year.
But maybe NDRA wants to wait and make sure the application is as strong as possible. A few months ago their research revealed a past FDA decision that might raise the odds of approval as long as they “do it that way.” Getting the data points in line has taken a little more time.
Meanwhile, the Europeans have already signed off on the device. That’s 5,500 hospitals or a $275 million revenue opportunity ($50,000 per TAEUS) that just opened up. Even if nothing happens on other regulatory fronts for months to come, NDRA is now free to start making money. And at this point, any slice of the initial $275 million market will feel mighty good.
Once you get the green light, you still need to convince the doctors they need to lobby hospitals to buy the equipment. NDRA has teamed up with the liver experts at the Medical College of Wisconsin while partnerships with the University of Pittsburgh Medical Center and Rocky Vista University do their share to spread the word. The more data that gets out into the journals, the easier the job gets.
A lot of doctors are probably eager for an efficient NASH testing system, so resistance is probably going to be mild at worst. When potential customers actively want to buy what you’re selling, all you have to do is give them a way to hand you the money.
And that’s the last big piece of the puzzle snapping into place. NDRA isn’t building a vast sales force to approach thousands of hospitals. That takes time and a whole lot of money. Instead, they’ve teamed up with GE Healthcare . . . which sells and supports the ultrasound machines that TAEUS plugs into.
If the ultrasound is the razor and TAEUS is the fancy new blade, NDRA has made a very powerful friend. GE is happy because the added functionality makes the ultrasound more relevant. NDRA gets to virtually “ride along” on the sales conversations. That’s what “facilitating introductions” means in that last link. Do you have an ultrasound machine? Did you buy it from GE? Have you heard that NDRA can leverage your existing machine to detect NASH?
THE BOTTOM LINE
Add it all up, NDRA has a solid shot at getting a lot of those hospitals to upgrade their existing ultrasound machines. Once they all do it, that’s billion-dollar potential, a real company maker.
Look at a company like Exact Sciences, which makes mail-in colon cancer tests. It took the last two years to book $1.3 billion in sales. This year it might do $1.2 billion as well. That once-obscure company is now worth close to $13 billion.
According to that math, NDRA only needs to sell a couple dozen TAEUS systems a year to justify its current market cap. The European hospitals can buy now. Even if NDRA hits 1% penetration of that market, we’re looking at a lot more than “a couple dozen” sales.
Remember, GE is helping. The data is flowing. Awareness around NASH isn’t fading. Doctors are waking up to the depth of the problem they’re facing as liver cancer and transplant numbers hit the red zone.
Day by day, those hospitals will get more receptive. And then “a couple dozen” will look small, at which point NDRA translates its potential into something a lot more substantial . . . and shareholders who saw the future in an obscure $15 million stock will be able to brag that they were early and right.
In recent news, FirstAtlantic Financial Holdings (OTCQX: FFHD) or First Atlantic Bank has experienced an uptick in volume. FFHD is a fully reporting holding company for FirstAtlantic Bank, a full service community bank headquartered in Jacksonville, FL. According to their reports, they have $436M in assets, and eight “financial centers” located in eastern Florida. The banking unit has a 5-Star rating from Bauer Financial, Inc. which they claim is the nation’s leading bank rating firm, and a 3-Star rating from Morningstar.
There are a few reasons for this volume increase and we’ll get into them in sufficient detail to give the casual investor a likely plan of action. First off, just a few days ago on Ausust 16, 2017 FirstAtlantic Financial Holdings (FFHD) announced a merger with the National Bank of Commerce (NBC) a Delaware corporation headquartered in Alabama. The announcement states that FFHD will continue to operate (and trade) under its own name after the merger is finalized, but the combined institution will reportedly boast approximately $3.1Bn in assets. The parent company of NBC, National Commerce Corporation (NCOM) is listed on NASDAQ.
Prior to the merger FFHD stock was trading from $10.40 to $16.85 and according to the terms of the agreement, every share of FFHD stock issued or outstanding prior to the merger will be converted into 0.44 shares of NCC common stock – or – be purchased for $17.25 in cash with a few details pertaining to NCC’s stake in the merger and the effect on outstanding purchase options left to be ironed out in the form of option cancellation and payment of an amount equal to the difference between $17.25 and the option exercise price. For those interested, NCC’s stock has traded between $35.00 and $40.45 through the past three quarters.
NCC has filed a registration statement form S-4 with the SEC to register shares of NCC common stock to be issued to shareholders of FirstAtlantic but FFHD will continue to be operated, managed and traded under its own name for the foreseeable future.
The other reasons for the recent uptick include a positive earnings report issued in August and the hire of a new Assistant Vice President.
As mentioned previously, FFHD has seen a recent spike in volume. It currently sits at about 95,700, but the 52-week average is still only 7,095. Price as of August 18, a few days after the merger announcement is at $16.76, which is a sharp spike over the previous year, with the price going from around $10 in August of 2016 up to $13.60 a week before the merger.
If you’re interested in detailed financial reports and news, these items are available at the company’s website: https://www.firstatlantic.bank/About-Us/Investor-Relations.
Based on our analysis, this one is likely to retract just a bit over the next week or so, but a continued steady growth curve topping out at up to $25 within a year or so is definitely not out of the question. Of course, anything could happen including another spike resulting from positive news or greater publicity.
If a group of people was asked to name the publishing outlet that commands the biggest Facebook page (as defined by the largest number of individual members), chances are companies like BBC or Mashable would be top of the list. Narrow it down to sports media outlets and ESPN would be a top contender. Very few people, if anyone, would return an answer of GiveMeSport. With more than 24 million followers, however, and more than 26 million likes (as of late July 2017) the publisher outperforms all of the above-mentioned household names. For reference, ESPN has the next largest single sports publisher Facebook page with 17 million members.
Why is this important?
Facebook is quickly becoming one of the largest and most prominent news aggregators in the world. The social media platform is an integral part of any content publisher’s arsenal and its dominance in the content serving and sharing space is only expected to grow over the coming decade.
Companies are rushing to figure out how to take advantage of this trend and are having varying degrees of success to this aim. The above mentioned Mashable has created its own technology, called Velocity, that helps it to predict which stories are likely to go viral and when and, in doing so, allows it to capitalize on this early stage information.
Other companies haven’t had as much luck.
The ever changing algorithms that underpin Facebook’s content delivery platform make it difficult to find a sweet spot and even more difficult to maintain it.
So how has GiveMeSport managed to amass such a large following?
The answer is rooted in the company that’s behind the outlet – BREAKING DATA CORP COM NPV (OTCMKTS:BKDCF) (BKD.V) (CVE:BKD). Breaking Data acquired GiveMeSport back in December 2016 and has spent the last six months incorporating its proprietary artificial intelligence (AI) technology into the media outlet’s day to day activity. With this acquisition, not only has Breaking Data given GiveMeSport a considerable technological advantage over its peers, it’s also served to offer public markets an exposure to the outlet’s success (which is what drew the attention of our analysts).
Breaking Data acquired GiveMeSport back in December 2016 and has spent the last six months incorporating its proprietary artificial intelligence (AI) technology into the media outlet’s day to day activity. With this acquisition, not only has Breaking Data given GiveMeSport a considerable technological advantage over its peers, it’s also served to offer public markets an exposure to the outlet’s success (which is what drew the attention of our analysts).
By way of a quick introduction to GiveMeSport and for those not familiar with the platform, it’s a news and entertainment outlet that – as implied by its name – focuses on serving sports related content to its users. The platform is fronted by a website, www.givemesport.com, and traffic is directed to the site through various social channels, including the above mentioned Facebook page.
While this is a website at core, the key thing to recognize here is that Facebook is the real growth driver for the outlet. Its founders are ex-Facebook strategists for various sports stars in the sports and entertainment space and the experience drawn from this side of the operation is what feeds into the company’s success i its Facebook endeavors today.
The way it works is as follows: Breaking Data and GiveMeSport have developed an AI technology that is able to track changes in Facebook’s content algorithm (not directly, but through the impact of the changes on the way the platform’s users interact with GiveMeSport’s content). When it detects changes, it automatically suggests strategic alterations that not only limit the impact of changes on the company’s content’s reach, but also seek to capitalize on it.
This AI approach is what sets GiveMeSport and Breaking Data aside from other publishers in this space. Whereas another publisher may take a 30% hit to its traffic on the back of a Facebook algorithm change and not be able to recover from the hit, GiveMeSport’s AI technology detects the change, mitigates its impact and alters the company’s strategy to try and take advantage of what is ultimately hurting its competitors.
All this is great but it means nothing to an investor in Breaking Data if it doesn’t translate to revenue – so how does Breaking Data generate sales on the traffic it’s attracting through its GiveMeSport platform?
Just as is the case with the vast majority of internet publishers, the answer is through online advertising.
With 32 million monthly visitors (this is a six month old metric but it’s the best we have available, chances are the figure is higher now) GiveMeSport has a very large audience to which it can serve advertisements of all shapes and sizes. Additionally, with a sporting focus, this audience is not only very large, it’s also very diverse. NFL, NHL and NBA fans comprise a large portion of the site’s users and each of these offers a different demographic and user type to the advertisers that want to gain exposure to a potential sales base through the platform.
To date, some of the biggest names in the world have advertised through the GiveMeSport platform, including Mercedes Benz, Bayerische Motoren Werke AG (ETR:BMW), American Express Company (NYSE:AXP) and Electronic Arts Inc. (NASDAQ:EA). These are billion dollar companies achieving quantifiable results through a relationship with GiveMeSport and, by proxy, Breaking Data.
So what’s next?
As per the latest available numbers, Breaking Data generated $1.08 million revenues for the twelve months to January 31, 2017. At that time, however, the GiveMeSport acquisition was less than one month old and the outlet’s advertising revenues were not included in the statement. As such, the next major catalyst for this stock is the reporting of financials (presumably, first quarter, but management hasn’t confirmed when it will start to include GiveMeSport in its audited numbers) that offer insight into just how much of a difference the acquisition makes to Breaking Data’s top and bottom lines.
Beyond that, the outcome of a recently announced marketing strategy that sees the company team up with NFL UK to develop an original content series themed around attempts at Guinness World Records is very much on the catalyst radar.
If this collaboration materializes as expected, it could expand the company’s reach to a television audience and – in turn – could dramatically increase its potential to command premium rates from advertisers looking to gain exposure to its userbase.
Blox Inc (OTCMKTS:BLXX) has made nice gains today on record volume. Today BLXX traded from $0.04 to highs of $0.09 and is currently sitting around $0.08 pos.
Todays total $ volume is just under $40,000.00 but even that is more than its traded in a single day for more than a year. With little selling pressure todays gains of 70% could just be the beginning of a nice move back to prices around $0.35 and needless to say its not going to take much volume to really move BLXX.
If less than $40,000 in trade value can move BLXX 70%
BLXX could really have some potential over the near future and we will continue to be watching and updating our subscribers.
Blox Inc. (“Blox”), is a publicly traded Resource Exploration and Development Company.
Blox Inc. is focused on West Africa and at present has three Gold concessions in Ghana and one Gold concession in Guinea.
Blox Energy aims to green the mining process by implementing renewable energy into its own production processes and ultimately into those of other bulk power consumers in West Africa.
Blox’s shares trade on the OTCQB under the symbol BLXX.
Blox Inc. is based out of Vancouver B.C. Canada
Bitcoin without Owning Bitcoin, Bitcoin Investment Trust (OTCMKTS:GBTC)
Bitcoin Investment Trust (OTCMKTS:GBTC) is a private, open-ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables investors to gain exposure to the price movement of bitcoin without the challenge of buying, storing, and safekeeping bitcoins. The BIT’s sponsor is Grayscale Investments, a wholly-owned subsidiary of Digital Currency Group.
So for those of us that would like to invest/trade bitcoins but don’t want to have to deal with bitcoin wallets or transferring funds around you can easily use your current trading platform to purchase GBTC and trade just like any other stock.
Bitcoins Massive Run
Bitcoin has been on a massive run as of late with a value of more than $2,715 today per bitcoin and its not just the regular investors who are taking advantage of the opportunities presented with cryptocurrencies. Unless you have been hiding under a rock for the last few months you’ve heard someone or read something about Bitcoin and thats because its made a run from under $500 in 2015 to a current price of $2,715 6/20/17.
Im not going to try to explain what a bitcoin actually is because it seems that no longer matters, its the fact that the public, businesses, and even governments are beginning to recognize bitcoin is not going away.
What is a Bitcoin :
Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need to give your real name. More merchants are beginning to accept them: You can buy webhosting services, pizza or even manicures.
No one knows what will become of bitcoin. It is mostly unregulated, but that could change. Governments are concerned about taxation and their lack of control over the currency.
Today (OTCMKTS:ACBFF) Aurora Cannabis had gains of more than 7% on news that they will be making investments in Hempco HEMP.V
Both of these companies are leading the way in the cannabis industry. With growing interest from consumers and manufactures alike, hemp products are trending and investors are begging to be part of this movement.
VANCOUVER and BURNABY, BC , June 8, 2017 /CNW/ – Aurora Cannabis Inc. (the “Company” or “Aurora”) (ACB.V) (ACBFF) ( Frankfurt : 21P; WKN: A1C4WM) and Hempco Food and Fiber Inc. (“Hempco”) (HEMP.V) are pleased to announce that Aurora will be making a strategic investment in Hempco for an ownership stake of up to 19.9% on a fully diluted basis, subject to Regulatory and Board approvals, as well as satisfactory completion of due diligence. Additionally, subject to customary conditions, Aurora will obtain an option to acquire shares from the majority owners of Hempco that, upon exercise of the option, will bring Aurora’s total ownership interest in Hempco to 50.1% on a fully diluted basis.
This news brought hungry investors into both ACBFF and HEMP.V with gains in ACBFF of more than 7% and HEMP.V showing double digit gains around 14%.
Hempco is one of the world’s largest industrial producers of hemp and hemp products, and currently offers three primary product lines: (1) bulk and packaged food products (e.g. hemp protein powder, hemp seeds or hearts, hemp oil etc.); (2) hemp fibre; and (3) nutraceuticals. Hempco’s line of packaged foods are sold under the brand “Planet Hemp” and are distributed globally in seven countries.
The target market for these products includes, but is not limited to, health conscious consumers, including vegetarians seeking to supplement protein and reduce or eliminate animal product intake, as well as an increasing number of consumers focused on managing and preventing a variety of health issues through a healthy diet, known as “LOHAS”, Lifestyles of Health and Sustainability, and “millenials” looking for clean and “green” products.
In August of 2016 ACBFF was sitting around $0.35 a share but just a few months later it hit a high around $2.70 in the middle of November. Over the next 6 months ACBFF bounced between $1.70 and $2.65 with average volume over the last 30 days around 490,000 shares. Just in the last week some heavy than normal selling brought the PPC to a low of $1.50
We will continue to watch ACBFF over the short term and keep you updated on any changes that deserve your attention.
A World Renowned ‘Big Mining’ Geologist Is Working To Build The Next Billion Dollar Junior Gold Company: Dataram Corp (NASDAQ:DRAM)’s US Gold Corp.
Back in 2011, as part of this interview conducted by Rockstone Research, mining analyst Stephan Bogner asked the interviewee, geologist David Mathewson, what drove him to become a part of the then young gold exploration company Gold Standard Ventures Corp (NYSEMKT:GSV). Bogner highlighted Mathewson’s career to that point – something we’ll look at in more detail shortly – as justification for the suggestion that a tiny explorer, worth just a few million dollars and with nothing in the way of confirmed resources at that point, wasn’t really worthy of the geologist’s time and attention.
When you’re one of the most respected geologists in the world, in other words, why devote your attention to a tiny player in the space?
Mathewson answered as follows:
“Successful exploration is all about applying effective and often new ideas, basically geological concepts, in entrepreneurial ways… public junior exploration companies provide the best vehicles to do exactly what needs to be done to be successful.”
This year, Gold Standard Ventures hit a market capitalization of more than $600 million. The development of the projects that account for the vast majority of this valuation, the Railroad-Pinion district and the North Bullion and Bald Mountain discoveries, was spearheaded by Mathewson during his time at the company.
Prior to his time at Gold Standard Ventures, Mathewson accrued more than thirty years’ worth of experience as a geologist in the gold sector, with the vast majority of this time spent in senior exploration positions at gold mining giant Newmont Mining Corp (NYSE:NEM). He served as Head of Exploration in Nevada for the company, and is credited with some of the major discoveries across the Carlin Trend and the Great Basin – two of the most resource rich gold areas in the world.
So, why are we talking about him here?
Well, a company called Dataram Corp (NASDAQ:DRAM) is on the verge of acquiring a company called US Gold Corp. Dataram is a NASDAQ traded technology company that is looking to diversify its operations, and it’s doing so through said acquisition, which management expects that (subject to shareholder approval) will close in between 60-90 days.
US Gold Corp. is a young, currently privately held (but soon to be available on the public markets by way of the just noted acquisition) natural resource miner, with two high-potential projects in Nevada and Wyoming.
The company’s CEO is Edward Karr, a respected investment banker. Its COO is David Rector, a gold industry veteran.
And here’s the most interesting part – VP, Head of Exploration is Mathewson.
What we’re looking at here, then, is a company that is in an almost identical position today, to that of the above-discussed Gold Standard Ventures back when Matheson joined at the turn of the decade. That is, it’s a young company with a couple of promising projects, looking to develop its assets into resources that it can sell to, or use as the basis of JV agreements with, incumbent mining entities.
If successful, and a look at Mathewson’s track record suggests there’s a good chance that under his direction it will be, we’re looking at a huge potential upside from current valuation (for reference, Dataram’s market capitalization as of April 24 is $5.8 million).
With this in mind, then, let’s look at the projects in question.
Two properties comprise the company’s asset portfolio right now. These are the Keystone project, located in Nevada, and the Copper King project, located in southeast Wyoming. The former, Keystone, is the project in which Mathewson has had a hand, and it’s likely going to be the primary value driver for the company going forward – that is, it’s the project on which US Gold Corp. is basing much of its long-term valuation.
As thing stand, however, it’s at an earlier stage of development than Copper King. To put this another way, Keystone is an exploration asset, while Copper King is a near-term production asset.
Copper King is located 20 miles west of Cheyenne, Wyoming’s capital, and most populous city. It’s what’s classed as an advanced exploration and development property, and it falls within the Silver Crown Mining District of the state, a district well known for its mining friendly economics.
Back in 2012, a group called Mine Development Associates (MDA) published a Preliminary Economic Assessment (PEA) detailing the resource and its estimates. As per the PEA, Copper King boasts the following:
- 1,534,000 Measured and Indicated gold equivalent ounces
- 345,000 Inferred gold equivalent ounces
- $159.5 million Net Present Value (NPV) at $1,100/oz. Au and $3.00/lb. Cu
Of course, gold is priced higher than the per oz. price used for this assessment (most recent spot price $1,256 versus the $1,100 used above), meaning the NPV is likely considerably higher than the PEA implies. Copper is down slightly ($2.55 versus the $3.00 used), but the negative impact on NPV that the decline in copper implies should be outweighed by the positive impact on NPV brought about by the rise in gold.
Over the coming twenty-four months, US Gold Corp. intends to execute on a development strategy that should bring with it numerous catalysts, each of which has the potential to induce an upside revaluation for the company as and when they hit press. During 2017, these catalysts include an updating of the PEA (to adjust the above-discussed cost inputs) and the initiation of a permitting strategy. During 2018, management expects to move to advance into a Pre-Feasibility Study (PFS), as well as continue to explore and develop the property to refine estimates (and potentially expand estimates) ahead of permitting.
Beyond this activity, we see a JV announcement, or the offloading of the property to a larger name (which is becoming an increasingly popular exit strategy in the junior gold space, based on the reduction in exploratory activity during the low-gold years) – each of which could initiate a dramatic upside revaluation.
That’s the Copper King project; what about Keystone?
As mentioned, this is the big one for the company. It’s the project Mathewson has identified as potentially being even more valuable than the Railroad resource that underpinned the Gold Standard Ventures $600 million valuation, and it’s the resource we’re looking to as providing numerous development-type catalysts in parallel to the Copper King advances.
One of the most notable qualities of the project is that it’s located on the Cortez Gold Trend, just 10 miles south of Barrick Gold Corp (USA) (NYSE:ABX)’s Cortez mine – one of the largest mines in the world and one of Barrick’s flagship complexes, with nearly 10 million oz. in proven and probable reserves. The project produces around 1 million oz. annually. The image below illustrates the location of US Gold Corp.’s Keystone project in relation to the Cortez complex.
Mathewson recently discovered and consolidated the project, and US Gold Corp. is banking on the idea that this is his next big discovery, and that it will add to his long list of successful discoveries (and developments) in Nevada across his thirty-five-year career in the state.
The project itself covers more than 15 square miles of mining claims, and based on drilling to date, has been shown to contain high grade, thick intercepts of gold at very shallow depths. This means two things: that the extraction of the shallow resource should be relatively cheap, and that there’s likely more gold below the shallow intercepts.
So what’s next at the project – or in other words, where are the catalysts coming form with relation to Keystone?
The majority of 2017 will be spent surveying the property in an attempt to identify the potentially most rewarding regions, and claims, and to put together some solid estimates as to what the project might hold from a resource perspective. Once surveyed, Mathewson is going to identify initial drill targets (this is his specialty) and with these targets in place, the drilling program will kick off.
Throughout 2018, then, the company is going to execute on the drilling program and prove up its discoveries (and in turn, its estimates) on the back of the drill results.
Just as with Copper King, we expect (and this is supported by management communication) that the exit strategy on this one will be to develop to a point just pre-production, and then offload the project to a larger name, or strike a JV agreement. This helps the company to avoid the costs of a ramping up to production, while maintaining an interest in the gold that its team has worked to prove.
Bottom line: there are plenty of potential catalysts across the coming two years, a respected and experienced management team and one of the industry’s most well known, and highly regarded, geologists/explorers at the helm of the project’s advancement. US Gold Corp. is also debt free, and based on an October 2016 financing that saw the company net just shy of $12 million, is fully funded through end 2017.
This is early stage gold, so it’s not a risk-free exposure. That said, for an investor looking to allocate to the space who is also looking for a quality that puts said allocation ahead of its peers, US Gold Corp., and Mathewson, is the stock to watch.